Extended Reality & Metaverse Trends: Technology and Market Overview10 min read
Over the past few years, augmented reality (AR), virtual reality (VR), and mixed reality (MR) have grown rapidly, bringing new technologies, devices, and new use cases to users and businesses. Eventually, all these technologies united under the umbrella of extended reality (XR), representing the whole range of digital solutions for headsets, smartphones, and wearables. The technology growth was relatively steady until the recent events of 2020-2021, which worked as a catalyst for the change.
Everything accelerated when Facebook announced its rebranding to Meta. With the evolution of its name, Meta introduced new strategic goals of conquering extended reality, making it accessible to everyone, and having ten billion users on their platforms within the next ten years. Metaverse―a digital world by Meta, should become the main development vector, which combines all that is necessary for both consumers and businesses.
COVID pandemic and the need to work remotely boosted the already growing XR technology adoption rates. Businesses started to rebuild processes to keep remote workers efficient in the new settings, and XR solutions were a huge part of that.
Let's dive into what happens on the market and with XR technologies, and how the future of industrial XR use cases will look like worldwide.
EXTENDED REALITY MARKET TRENDS
Accenture research showed that 80% of business executives believed that it is crucial to leverage XR solutions to go over physical distance during employee engagement. For instance, the US government is interested in immersive technologies for training purposes and willing to invest up to $11 billion into augmented, virtual, and mixed reality training systems by 2022. North America stands as a pioneer and holds the largest market share in XR, building up the new use cases for XR. However, its growth speed is even higher in the Asia-Pacific region right now. The extended reality innovation will become the focus of many industries, particularly in the military, manufacturing, retail, and more.
According to Mordor Intelligence, the market is growing yearly, mostly due to the technology advancements in motion tracking, increasing private and government AR & VR investments, and the adoption of 5G networks to process an increasing amount of shared data.
Financial trends in Extended Reality
According to Marketsandmarkets and Mordor Intelligence reports, we may observe slightly different dynamic scenarios of growth in the XR market. Both agree that the extended reality market is developing faster than it did in previous years. In 2020, the XR market was valued between $26.05 billion and $33.0 billion. While showing a positive compound annual growth rate (CAGR), reports predict how different market valuations by 2026, anywhere between a more conservative $125.2 billion and a more optimistic $463.7 billion.
Mordor Intelligence reports that in 2020, the global AR and MR market was valued at $553.27 million and is expected to reach $5.81 billion, increasing by 47.9% by 2026. AR and MR software development valuation is estimated to reach $32 billion by 2026. Currently, the AR market is worth a purported $3.5 billion. AR investments are becoming increasingly bigger, which brings virtual content into the everyday world. People have gotten used to the AR environment by using a lot of smartphone applications such as Facebook, Snapchat, and Instagram.
According to Business Data Platform Statista, the AR-VR market will increase up to $209 billion worldwide by 2022. In 2020 the number of global VR device shipments was 13.48 million units, and by 2026 it is expected to reach a volume of 112.62 million units, which in turn will be increasing by 33.85% over the forecast period of 2021 to 2026.
User trends and numbers
Today, AR technology is more popular than VR. GlobalWebIndex shows that the majority of AR users are the younger generation, aging on average from 16 to 34. 70% of them believe that XR can bring a lot of benefits to their lives. For instance, almost half of the consumers would be more likely to choose a retail store that utilizes AR or VR technology. Yet, just over half of consumers (53%) reported that they were interested in using VR or AR in the next three months.
Where does XR & Metaverse go?
With the major shift from Facebook to Meta, technologies that are built on XR and virtual worlds experienced a significant push forward. Meta’s focus is to bring Metaverse to life and to connect, find communities, and grow businesses in virtual worlds for everyone to enjoy.
As Meta has set the development vector in this innovative industry, we may assume that the company will release games and simulators, developed specifically for Metaverse, very soon. These applications will provide ample opportunities for both ordinary users and businesses. Other common games will face new competition from Meta and would need to offer new ways for gaming to rival the entertainment that Metaverse offers.
In a short time, the VR equipment will be optimized, elaborated, and improved for maximum user engagement in Metaverse. Other manufacturers will not lag either, which has already been proven is by the latest news.
Meta will enable its users to enjoy not only the visual advantages of Metaverse but also the tactile ones by using the technologies of the acquired companies.
XR Technology Development on Markets
The extended reality adoption has been significantly accelerated with the COVID-19 pandemic, Meta's announcement of Metaverse, and less market moves. Let’s see what extended reality solutions look like among the biggest companies.
- Meta is reinventing communication tools: The Facebook Reality Labs teams are working on a unified platform for Meta’s VR services. Horizon Home aims to provide a social place where you can interact in VR with other users who join you from their homes, enabling Meta’s communication tools like Facebook Messenger to work seamlessly in the VR space.
- Metaverse with haptics: Meta is also working on the haptic gloves prototypes that should serve as human-computer interaction (HCI) mediums and provide feedback through sensible touch while interacting in real and virtual worlds.
- Mixed reality with Microsoft Mesh: Microsoft Mesh is providing tools to develop environments and worlds where users communicate using gestures, emotions, eye contact, and facial expressions. Mesh aims to support a wide range of devices like VR headsets, smartphones, PCs, and HoloLens 2.
- Unity Industrial Assets: Unity is providing 3D models and assets to recreate the 3D environment in VR and AR for manufacturing plants and production sites. Hyper-realistic assets allow users to build interiors and visualize spaces without significant investments and by saving time on prototyping.
- Electromyography: XR Today reports that electromyography (EMG) has been around for several years and is used mostly in medical settings to scan anomalies in movements. Currently, companies develop solutions that enable EMG to be a medium in human-computer interaction, enabling digital inputs directly from brain impulses. For AR, it brings new ways to control devices just with a thought. However, this still requires more extensive research.
These are several developments that fuel extended reality adoption rates across both consumer and business markets. New devices enable new communication mediums, and new human-computer interaction approaches will enhance experience while interacting in digital worlds.
What industries will benefit the most
Extended reality is a fast-developing and highly customizable set of technologies, that finds its place in almost every industrial segment. However, several industries that had to transform their business processes during social distancing times caused a boost in the development of the specific solutions for remote work.
- Manufacturing is one sector, where XR finds its applications in a form of digital twins that replicate industrial equipment for remote maintenance. XR brings together technical experts and field engineers from different parts of the world to work on the same problem simultaneously, having a high-resolution digital model of equipment or a product right in front of their eyes. Moreover, with the development of automated visual inspection solutions, maintenance and quality assurance became semi-automated, having field engineers receive alerts and notifications when they scan equipment or products with their cameras.
- Healthcare XR solutions empower doctors and patients as well. For instance, therapists get a whole new set of assistive devices that accelerate mental health, fight phobias, and help to make treatment for patients faster and more convenient. By combining haptic feedback technologies and visual images of objects, our R&D team at SoftServe, develops the use cases to fight fears by showing patients safe holograms of their phobias and letting them safely interact with the holograms until the fear weakens and could disappear.
- Training & EdTech gains a whole spectrum of e-learning solutions, bringing teachers, coaches, and experts together with the audience in the same virtual or XR study space. Real-life interaction in virtual rooms combined with digital twins of objects or equipment helps to describe how things work faster and visualize everything easier, wherever a person may be.
- Real Estate, construction, and asset management leverage XR solutions to visualize highly realistic 3D replicas of properties, that can be accessed from anywhere around the world. Immersive floor plans, interior designs, or digital twins of the property assets can be easily reachable from both a smartphone and any headset in virtual or augmented reality.
- Retail gets a myriad of opportunities to engage clients and provide better shopping experiences for them. From virtual fitting rooms to try-on haircuts or clothes, stores can reach and improve customer journeys with the new tools accessible both from home and store.
Challenges and Opportunities for Extended Reality
As the technology is still in the major adoption phase, it goes through regulation transformation, and integration challenges.
Most of the time extended reality applications collect and process real-time data about surroundings and the user. This data must be protected within the XR platform that it is being used in, and all the data must be anonymized to comply with GDPR, CCPA, or DPD laws.
Historically, XR devices are bulky and rarely comfortable to use for an extended time. Today, these days XR applications are being built for the new generation of headsets, smartphones, and wearables that are designed for a comfortable user experience. The hardware itself is already mature and efficient enough to process and display high-resolution XR images, with performance and battery capacity that can serve for hours.
Integrating XR solutions used to be another challenge to address across industries, however, device vendors, software companies, and third parties have already provided toolsets, APIs, and SDKs to customize the XR experience and integrate it into the existing infrastructure.
The technology cost steadily goes down, enabling many companies to adopt the initial XR technology use cases, or at least to build a foundational platform to integrate XR solutions integrate into their infrastructure.
As each day passes, we are one step closer to solving these issues so that we will see many more mainstream applications of all XR technologies over the coming years.
For the next few years, the technology adoption rate will only increase, introducing many market players that innovate their business and production processes with XR solutions. We at SoftServe R&D, have already walked a long path of developing XR applications and devices and building efficient business processes for remote work based on XR. Companies are already building solutions that bring remote workers together, simplifying complex training involving equipment, creating long-lasting customer experiences in venues, and much more.
The XR train has hit the road. We’re on, come join us!